BI reports 8% increase in turnover boosted by UK

Fine wine and spirits merchant BI has reported an 8% increase in annual turnover to £95 million boosted by a hike in sales to UK buyers.

In the year to 31 December 2018, sales to UK buyers rose 18% to £36 million, taking its share of total group sales to 38%, with Asian buyers accounting for 45% of total sales.

European buyers acounted for 10%, while the USA and the rest of the world accounted for the remaining 7%.

In terms of investment, Haut Brion 1989 delivered the best return on investment in the year, up 37% to £23,500 per case (12 bottles).

The strong UK performance was evidence that wine remained a “stable investment” in time of market uncertainty, said the business.

“The particularly strong UK-based trading reflects a combination of strong momentum in Bordeaux and a selection of new releases outside of Bordeaux, as well as an increased focus on wine from an investment perspective,” said managing director Gary Bloom.

With an acknowledged low correlation between fine wine and other asset classes, it was perhaps "unsurprising" that this focus had gathered pace as the financial industry saw broader market disruption across Q4 2018, he added.

“2018 proved another strong year in the market and at BI. Whilst the spread of purchases was broad, there was a noticeable focus on what might be deemed ‘the very best’, in terms of producers, estates and vintages. Many buyers are taking a long-term view and securing their share of top wines from back vintages before they become too scarce,” said Boom.

Sales through LiveTrade platform were up 17% to £39 million (FY 2017: £33 million), with the average trade totalling £6,700

“With First Growth sales totalling £22 million, this comfortably makes LiveTrade the most significant global platform for trading First Growths. This trade in physical vintages (as opposed to futures) reflects the continued flight of private capital away from equities and into physical assets.”

Bordeaux remains the most traded and liquid market with the five First Growths, comprising Chateaux Haut Brion, Lafite, Latour, Margaux and Mouton Rothschild, making up over 55%, or £22 million, of total LiveTrade sales, a 22% increase from 2017.

Champagne and Burgundy sales both grew around 20% to £12 million and £13 million respectively, thanks to both increased global demand and the release of new, highly sought-after vintages, according to the annual results.

Bordeaux was up 10% to £42 million (excluding En Primeur sales) while US wines doubled to almost £6 million.